Family bonds are a natural foundation of commitment, engagement, effort and transparency. They provide a stock of ‘socio-emotional wealth’ in the bank that all businesses strive for, and that takes much energy – sometimes called ‘sweat capital’ – and investment in corporate culture and people management to replicate. This emotional core means familyfirms can be more resilient through difficult times, driven by a shared and deeplyrooted sense of purpose and reward. It’s personal. Leaders want to build a legacy, to pass on a business in a better condition than when they took over, an asset for generations to come. At the same time, this personal, more intimate mission leads to a different variety of entrepreneurialism, one that’s always in a state of tension with the idea of growth. There is a heightened awareness of what poor decisions and failures will mean for family members, for that legacy. Growth strategies may threaten the family need for liquidity and control over the business. Continuity of success is something that needs to be carefully plotted and guided. In our unpredictable global business environment, where the cycle of new technologies and potential for disruption to markets is accelerating, all enterprises need to be open to innovation, at least to the need for evolution. In the UK, for example, there are almostfive million family businesses. They provide half the nation’s private sector jobs, half the economic activity and 25%of Government tax revenues. An inability for family boards to adapt strategically, to take considered risks, could have serious implications. 36 |
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